Apple Accuses OpenAI of Building Hardware Business on Stolen Trade Secrets

Apple has launched a sweeping legal offensive against OpenAI, alleging the artificial intelligence leader systematically pillaged confidential hardware specifications and supply chain data to build its own rival consumer devices. The lawsuit, filed Friday in the Northern District of California, marks a definitive end to the brief, uneasy alliance between the iPhone maker and the startup behind ChatGPT.

The 41-page complaint describes a coordinated effort by OpenAI to bypass years of research and development by recruiting key Apple personnel. At the center of the allegations is Tang Tan, OpenAI’s chief hardware officer and a former Apple vice president who spent over two decades at the company. Apple claims Tan used confidential codenames during the recruiting process and even directed candidates to bring physical Apple hardware components to interviews.

“OpenAI’s nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets,” Apple stated in the filing.

This litigation signals a strategic pivot for Apple, which recently abandoned its partnership with OpenAI in favor of Google for its upcoming Apple Intelligence features. The shift comes as Apple prepares for a major leadership transition, with CEO Tim Cook scheduled to hand control to John Ternus in September.

For OpenAI, the stakes involve more than just legal fees. The company is reportedly preparing for an initial public offering while attempting to diversify its revenue beyond software. By acquiring io Products—a firm co-founded by legendary former Apple design chief Jony Ive—for $6.4 billion in May 2025, OpenAI signaled its intent to challenge the smartphone’s dominance with a new class of AI-centric gadgets.

The complaint also names Chang Liu, a member of OpenAI’s technical staff, accusing him of downloading dozens of confidential files. These documents allegedly included engineering presentations and proprietary data for unreleased products. Apple further claims Liu instructed other employees on how to evade internal security teams when exfiltrating data.

OpenAI has denied the allegations, telling Fortune it has “no interest in other companies’ trade secrets” and remains focused on its own innovation.

The dispute highlights the aggressive nature of talent acquisition in Silicon Valley, where the line between professional mobility and intellectual property theft is frequently litigated. Apple is known for its culture of extreme secrecy, a standard it claims OpenAI violated by leveraging proprietary terminology to approach partners in Apple’s supply chain.

While Jony Ive is not personally named as a defendant, his firm’s acquisition by OpenAI is central to the narrative of a “rotten” foundation. The legal battle joins a growing list of challenges for OpenAI, which is already defending against copyright claims from the New York Times and has previously faced recruitment-related litigation from Elon Musk’s xAI.

Apple is seeking monetary damages and a permanent injunction to prevent further use of the disputed information.